Losing a home in foreclosure can be a very upsetting experience. Even the possibility of a foreclosure is enough to cause extreme stress and anxiety for homeowners in New Jersey, and many of them feel as though there is nothing they can do when they are informed that they have defaulted on a loan and are at risk of losing their home. Homeowners need to be aware, however, that just because a bank says that a borrower could lose their home does not mean that is accurate or true. Unfortunately, this is a lesson that came too late for many people who wrongfully lost their home during the housing crisis.
Many homeowners are aware of the suspect and now-banned practices that were utilized by top financial institutions for years. These shady and unlawful business methods resulted in the wrongful foreclosure of many homes. However, a new report indicates that the number of people needlessly affected by these foreclosure proceedings is much higher than previously estimated.
According to regulators, nearly one-third of all borrowers were wrongfully dragged through the foreclosure process by 11 of the top financial institutions. About 1.2 million people were erroneously informed that they were losing their home and about 244,000 people eventually did lose their home. However, reports indicate that many of these people had actually not defaulted on their loans and were protected by federal laws or were in compliance with modified bank agreements. This includes 28,000 homeowners who lost their home despite being protected under bankruptcy laws.
People who are faced with losing their home do not always understand that there are protections in place to prevent people from facing wrongful foreclosure. The complexities of the housing crisis combined with the suspect practices of financial institutions can make the foreclosure process very confusing and intimidating. Rather than risk losing a home because of a bank error or illegal collection practices, homeowners can work with an attorney who understands this process and can help homeowners protect themselves from losing their home.
Source: The Huffington Post, “Foreclosure Review Finds Potentially Widespread Errors,” Shahien Nasiripour, April 9, 2013